The 5 Rules of Spending And How Learn More

The 5 Rules of Spending And How Learn More

Credit Card Options for People with Bad Credit

Banks and credit card companies only offer credit cards to people with good credit score. If you have a history of bad credit, then many larger banks and credit card companies will not approve your application. There are some companies, though, the offer specific credit cards for people with bad credit.

If you have a low credit score, then the risk will be greater when you are being considered for borrowing money on a credit card. Since the likelihood that you can miss payments is high, then this unsecured credit cad will be given very high interest rates. You credit card limit will also be lower. And you will not be given any perks that people with good credit rating enjoy. This includes cash back or air miles.

Another option for people with bad credit score is to get a secured credit card. There should be some kind of security against the amount that you are going to borrow. The balance on your savings or checking account will determine the credit limit of your credit card. You will get a credit limit that is slightly lower than the amount in your savings account. Not all lenders have the same policies so you need to check their terms and conditions on this.

You may be able to increase your credit limit on your secured credit card by making further deposits to your account. There are some credit card issuers who will give you an increase in your credit limit even without increasing your bank deposit but only if you are making regular payments. It is according to the discretion of the lender to increase the credit limit.

Applying for a joint account with a family member with a good credit rating is another option you have for applying for a credit card with bad credit standing. When it comes to interest rates, this will have the same rate as a normal card. Just make sure that you pay each month diligently. If you cannot, your co-signatory will need to ensure that he is able to manage payments on your behalf. If he fails to do this, then both credit histories will be affected.

If you shop around, you will be able to find the best credit card for bad credit. usually secured credit cards requires application fees and annual fees to be paid. Some fees are small but you should be aware that some less reputable card issuers take advantage of people who have trouble obtaining credit and charge overpriced costs.

So, if you have a bad credit history, you still have a chance to improve on your credit score by making good on the credit card you obtain even with bad credit.

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